In the acquisition process, most attention is often focused on the valuation, negotiations, due diligence and the final deal. Understandably, because that's where the difference is made in euros.
But a step that is at least as decisive for the success of a transaction receives remarkably little attention: creating a good longlist. This list of potential buyers or acquisition candidates largely determines the size and quality of the playing field in which an entrepreneur markets his or her business.
Smart software
At Crowe Foederer, we notice that entrepreneurs sometimes tend to focus only on one or two well-known parties. That seems efficient, especially if informal contact has already been made. But this approach limits the room for negotiation and increases the risk of a sub-optimal deal.
A carefully constructed longlist actually offers strategic space: more choice, better matches and a stronger starting point in the follow-up process.
What has changed this phase greatly in recent years is the use of AI-driven tools. Where we used to rely primarily on networks, industry knowledge and manual databases, we now use smart software that identifies relevant buyers based on public data.
Consider characteristics such as size, investment behavior, geographic expansion, previous acquisitions and even signals from the news or social media.
AI enhances judgment
An AI tool can generate a list of more than 100 potential buyers within seconds, taking into account the strategic fit. Among them are often surprising Namur names: parties that do not appear in standard databases, but were actively looking for acquisitions in a particular sector or niche.
AI does not replace human judgment, but rather enhances it. By combining technology with our sector knowledge and experience, we create longlists that are more comprehensive, up-to-date and relevant. It also allows us to move faster, which is essential in a market where timing is increasingly important. The quality of the final shortlist - and therefore the success rate of the deal - starts with the length and quality of the longlist.
AI-based approach
So for entrepreneurs and DGAs considering a sale, it is essential to take this phase seriously and enlist the help of acquisition consultants with an AI-based approach. It pays to look beyond the known network and rely on technology that uncovers patterns and opportunities that otherwise remain hidden.
A good longlist is not an afterthought, but a strategic starting point. And with the right tools, that starting point gets a lot better.
